(AIM: BPC) THE BAHAMAS: A GIANT OIL PROVINCE IN THE MAKING
Investor Presentation April 2011
Isle of Man Head Office: IOMA House Hope Street Douglas Bahamas Petroleum Company Plc 2D Seismic Tel: +44 1624 647883 Acquisition 2011
Email: [email protected] Website: www.bpcplc.com Important Notice
This presentation (“Presentation”) has been prepared by Bahamas Petroleum Company Plc (the “Company”) solely for its use at informational meetings relating to the proposed placing by the Company and is being delivered for information purposes only to a limited number of persons. By attending the meeting where this Presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations. This Presentation has not been independently verified by FirstEnergy Capital LLP, Novus Capital Markets Limited or Canaccord Financial Inc. (together, the “Agents”). The Presentation does not purport to contain all information that a prospective investor may require. While the information contained herein has been prepared in good faith, neither the Company nor its shareholders, directors, officers, agents, employees, or advisors (including the Agents) give, has given or has authority to give, any representations or warranties (express or implied) as to, or in relation to, the accuracy, reliability or completeness of the information in this Presentation, or any revision thereof, or of any other written or oral information made or to be made available to any potential placee or its advisers (all such information being referred to as “Information”). So far as permitted by law, neither the Company nor any of its shareholders, directors, officers, agents, employees or advisers (including the Agents) take any responsibility for, or will accept any liability in respect of, the accuracy, reliability or completeness of the Information or for any loss, howsoever arising from the use of this Presentation. In furnishing this Presentation, the Company does not undertake any obligation to provide any additional information or to update this Presentation or to correct any inaccuracies in, or omissions from, this Presentation which may become apparent. The Information is confidential information and the property of the Company. It is made available strictly for the purposes referred to above. The Information and any further confidential information made available to any recipient must be held in complete confidence and documents containing such information may not be reproduced directly or indirectly, used or disclosed without the prior written consent of the Company. By accepting delivery of this Presentation, the recipient agrees to return it at the request of the Company. This Presentation should not be considered as the giving of investment advice by the Agents, the Company or any of its shareholders, directors, officers, agents, employees or advisors. Each party to whom this Presentation is made available must make its own independent assessment of the Company after making such investigations and taking such advice as may be deemed necessary. Some statements contained in this Presentation or in documents referred to in it are or may be forward-looking statements, including, but not limited to, statements as to future operating results, reserves, work plans and potential acquisitions and contracts. Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words as “anticipates”, “aims, “could”, “may”, “should”, “expects”, “believes”, “intends”, “plans” or “targets”. Such statements reflect the Company’s current views with respect to future events and are subject to risks, assumptions, uncertainties and other factors beyond the Company’s control that could cause actual results to differ from those expressed in such statements. Although the Company believes that such forward-looking statements, which speak only as of the date of this Presentation, are reasonable, no assurance can be given that they will prove to be correct. Actual results may differ from those expressed in such statements, depending on a variety of reasons. Therefore, you should not place undue reliance on these statements. The development and production plans and estimates set out herein represent the current views of the Company's management. The Company’s Board reviews the production estimates on an ongoing basis. All planning is subject to available funding and capital allocation decisions. There can be no assurance that the results and events contemplated by the forward-looking statements contained in this Presentation will, in fact, occur. The Company and the Agent will not undertake any obligation to release publicly any revisions to these forward- looking statements to reflect events, circumstances or unanticipated events occurring after the date of this Presentation, except as required by law or by any appropriate regulatory authority. Nothing in this Presentation or in documents referred to in it should be considered as a profit forecast.
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2 Google Image showing Bahamas Petroleum Company Awarded Licences and Licence Applications
3 Bahamas Petroleum Company Group Overview
. Formed in 2005 and listed on the AIM market in Sept 2008 (reverse takeover) − Current market capitalisation is approx. US$399 million (GBP£249 million) as at 15/04/11 (BPC: AIM) − First oil company to conduct new work in the highly prospective southern Bahamas region since 1987
. First mover advantage in assembling a material portfolio of oil and gas leads in The Bahamas − World-class exploration with giant (500 mn boe) and super-giant leads exceeding 1bn boe − Attractive fiscal terms: low royalty; no corporation tax − Adjacent to Cuban waters where an active drilling programme is due to commence
. Partial farm-out strategy to fund major costs while retaining 100% ownership in some areas − Maintain meaningful working interest positions while reducing exploration risk
. Size and scale of the opportunity is significant − Attractive to Majors and NOCs who are increasingly active in the region
. Recent results and near-term seismic and drilling programme − New 2D seismic >1,300 km (June 2010 and January 2011) − Shipboard analysis defined multiple drillable prospects − Ryder Scott are initiating a CPR to define drillable prospects and assign resource estimates − 3D seismic planned for Q2 2011 − Plans to drill in H1 2012
. Raised US$ 73.0m (before expenses) March 2011
4
Bahamas Petroleum Company Board
Alan Burns: Non-Executive Chairman – Isle of Man
− Alan Burns is founder of the Bahamas Petroleum Company Group and has a successful 37 year career in the oil business including founding Hardman Resources, which was sold to Tullow Oil in 2006 for AUD$1.6bn − Involved in 28 new oil and gas field discoveries and developments including original Uganda discovery
Dr Paul Crevello: Director & Chief Executive Officer – USA/Bahamas
− Dr Paul Crevello is a carbonate reservoir oilfield expert and has wide international experience in the discovery of major oilfields − Considerable experience in Bahamas geological investigation
Michael Proffitt: Non-Executive director – Isle of Man
− Michael Proffitt is formerly an international banker with Barclays as worldwide Chairman of Barclays Private Clients International Limited. He is a former resident of The Bahamas and is well known in the Bahamian business world − Fellow of the Institute of Chartered Accountants in England and Wales
Dursley Stott O.B.E: Non-Executive director – Isle of Man
− Dursley Stott has played an important part in the Isle of Man’s financial growth during the last 50 years and is a founder of a successful stockbroking firm on the Island − Experienced international businessman
Edward Shallcross: Non-Executive director – Isle of Man
− Edward Shallcross has almost 40 years’ experience in the financial sector, predominantly at Barclays Bank plc, where he worked from 1960 until his retirement in 1998, at which point he held the role of Isle of Man Director and Senior Executive Director of the bank − Fellow of the Chartered Institute of Bankers 5
Corporate History – First Mover Advantage
US$13.5 Million Spent on Geological, Geophysical and Well Core Acquisition, Evaluation and Processing
The Company Paul Crevello is appointed as CEO announces 3D Seismic and Alan Burns preliminary processed and becomes Non-Exec results of interpreted Chairman Group is The Company seismic Five licences The Company founded Licence completes RTO onto Bahamas Paul Crevello joins approved by announces Acquire 3D seismic Target for first by Alan Burns awarded and AIM market through Government the Company as Governor intention to re- around potential well in reassigned acquisition of Falkland announces Chief Operating General of The domicile the drilling prospects Bahamas H1 November Gold and Minerals temporary Officer Company in 2006 Bahamas freeze on 2012 IOM licence applications
Apr May Jun Jul Aug Sep Jan Feb Mar Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Jul Aug Sep Apr May Jun Oct Nov Dec Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Q2 2005 Q3 2005 Q1 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q3 2008 Q2 2009 Q4 2009 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012
The Company applies for 2 The company additional licences announces Finalise negotiations The Company Board expands and tenders for completion of and announce submits licence to include Ministry of Energy The Company The Company additional seismic seismic survey and farm-out transaction applications Michael Proffitt grants the applies for signs Statoil joint successful initial as Financial licence additional exploration results Director application licences agreement on Ministry gazettes CPR by Ryder Scott on three licences The Bahamas Petroleum resource potential Company Company Statoil raises Cay Sal applications £5.1mn for 2D seismic campaign
6 Corporate Overview
Enterprise Value Simplified Organisational Structure GBP USD Price* 0.2025 0.3240 52 Week High 0.2575 0.4120 52 Week Low 0.0205 0.0328 52 Week Percentage Growth** 371 371
Market Cap (mm) 249.2 398.7
Cash and Cash Equivalents (mm)*** 3.8 6.1 Debt (mm) - - Enterprise Value (mm) 245.4 392.6 • Share price and Market Cap correct as at 15th April 2011 ** Based on share price as at 15th April 2011 *** Cash balance as of 31tst December 2010
Current Shareholders as at 28th Feb 2011 updated for subsequent trading notices Shareholder Shares Held % Fidelity 79,356,400 6.45% Morgan Stanley Inv Mgmt (UK) 68,438,886 5.56% TD Waterhouse 51,071,911 4.15% Hargreaves Lansdown Asset Management 43,775,892 3.56% Halifax Share Dealing 43,217,961 3.51% Barclays Wealth 42,610,279 3.46% Petroleum Geoscience* 17,730,000 1.44% Petrexasia Consulting* 15,300,000 1.24% Burns Family Investments* 15,164,989 1.23% Gumbo Investments* 12,360,000 1.00%
Total Management & Founders 61,139,989 4.97% Total - Top 25 Shareholders 675,948,455 54.93%
Total Shares in Issue 1,230,479,096
* Director Shareholdings • In March 2008 licences extended to 2012, when they will be further extended for 3 years ** Licences under review by Bahamian Government – no guarantee they will be granted
7 Five Year Share Price
28 100 The Company raises £43.3 million at a price of 18.75 pence 26 The Company begins to attract a number of other well known institutional investors and further broadens The Company announces preliminary 90 shareholder base results of 2D seismic 24
The Company raises £2.4 Bahamas Gov’t 80 22 million from institutional clarifies position. shareholders Bahamas Petroleum The Company and StatoilHydro at a price of 3.5 pence Company existing 20 sign JV Agreement for oil licences unaffected 70 The Company exploration in Bahamas waters The Company by suspension announces 2D complete placing of 18 seismic programme £5.1million results Bahamas Gov’t announces 60 16 suspension of Reverse Takeover new licence of FGML by Bahamas applications
14 Petroleum Company 50
GBp Volume Volume (000) 12 40
10
30 8
6 20
4
10 2 Pre RTO – FGML History
0 0
Jul07 Jul08 Jul09 Jul10
Apr07 Oct07 Apr08 Oct08 Apr09 Oct09 Apr10 Oct10 Apr11
Jan07 Jun07 Jan08 Jun08 Jan09 Jun09 Jan10 Jun10 Jan11
Mar 07 Mar 08 Mar 09 Mar 10 Mar 11
Feb07 Feb08 Feb09 Feb10 Feb11
Nov06 Dec06 Aug07 Sep07 Nov07 Dec07 Aug08 Sep08 Nov08 Dec08 Aug09 Sep09 Nov09 Dec09 Aug10 Sep10 Nov10 Dec10
May07 May08 May09 May10
Volume (000) Price
Past performance is not a guide to future performance 8 Bahamas Petroleum Company Technical Team, Consultants & Capabilities . Dr. Paul Crevello has over thirty years’ experience in US domestic and international exploration in more than 40 countries − University of Miami (Master of Science in Marine Geology) and Colorado School of Mines (Doctor of Philosophy in Geology) − Marathon Oil (1978-1994) directed worldwide carbonate geologic exploration research − Founded SE Asia’s first university petroleum studies programme in 1994 and founded Petrex Asia in 1997, developing it into a leading technical consulting firm − Numerous awards and distinctions from international societies for authorship and invited papers on carbonate and sandstone reservoirs, AAPG International Distinguished Speaker, Chairman of Joides Ocean Drilling Program and served on numerous committees and ancillary societies − Conducted research exploration in The Bahamas since 1975
. Standing U.S. and U.K. Consultants − Mr. Michael Coulthard, Subsea Completion Engineer − Mr. Jock Drummond, Seismic Processing Expert − Dr. James Edwards, Exploration Manager − Mr. James Ehrets, Reservoir Geologist and Engineer − Dr. Jon Kirkpatrick, Geophysicist and seismic specialist in carbonate exploration and exploitation − Mr. Paul Ozanich, Seismic Interpreter − Dr. Mark Rowan, Structural Geologist, expert in Gulf of Mexico and fold and thrust belts − Mr. Ian Thomson, Drilling Engineer − Dr. Douglas Waples, Geochemist
. University Industrial Programmes – University of Texas, Bureau of Economic Geology RCLR – University of Utah, EGI
9
Why The Bahamas?
Overview . A politically stable country, with an uninterrupted parliamentary democracy of over 275 years Commonwealth of The Bahamas Population: 310,426 . Excellent fiscal terms and English based Rule of Law GDP (US$ Bn): 7.38 GDP per capita (US$): 28,600 Unemployment Rate (%) 14% . Benefits from proximity to extensive oil field service and Median Age (years): 29.9 infrastructure providers in US Gulf of Mexico Literacy 96% Key industries: Tourism, banking, cement, oil transhipment, . Close proximity to energy-hungry US market, both in the GoM salt, rum, aragonite, pharmaceuticals and along the US Atlantic coast Source: CIA World Fact Book, Bahamas Department of Statistics - 29/12/2010
Industry in the Bahamas . Freeport is the major industrial centre of The Bahamas, with container facilities, oil off-loading terminals, dry dockage and an oil storage terminal – BORCO is one of the largest storage terminals in the Caribbean and Statoil recently acquired South Riding Point Terminal for approximately $263 million and have committed to several hundred million dollars in upgrades to the facility and job growth
. Ship registration under The Bahamas flag is the world's fifth largest fleet and the world’s largest registry for oil tankers with South Riding Point Terminal, Grand Bahamas several thousand vessels recently leased to Statoil – Many of the most respected international ship-owning companies fly the Bahamian flag, including Exxon International, Maersk Line, Teekay Shipping and Chevron. Registered luxury vessels include the ships of Norwegian Cruise Lines and Holland-America Cruises along with cargo steamers, frigates, freighters, tankers and tugboats
World shipping traffic including oil tankers near and through The 10 Bahamas
Why The Bahamas? Attractive Fiscal Terms
Royalty Rates and Leases terms: Production Level Royalty Rate Oil Production, up to 75,000 bopd 12.5% E&P Project Revenues/ BOE – Sorted by Free Cash Flow Oil Production, from 75,000 to 150,000 bopd 15.0% Oil Production, from 150,000 to 250,000 bopd 17.5% 100% 90% Oil Production, from 250,000 to 350,000 bopd 20.0% 80% Oil Production, in excess of 350,000 bopd 25.0% 70% 60% Gas Production 12.5% 50% Rentals: $0.92 per acre per annum charged for the area of a 40% lease, but these charges are deductible from royalty payments 30% Income taxes: Nil in The Bahamas 20% 10% 0%
Comparison of Licencee Revenues – GoM vs. Bahamas US
UK
Iraq Libya
Egypt
Congo
Gabon
Angola
Nigeria
Canada
Guyana
Norway
Namibia
Falklands
Bahamas*
Sierra Leone Sierra Cote d'Ivoire Cote
Government Take Capex Opex Free Cash Flow The increased potential return to the licence holder in The Bahamas Source: Rystad Energy, FirstEnergy Capital (February 2011) is largely due to zero * Based on a single 600mmbbl discovery with production start-up in 2015 corporate income tax Revenue splits based on all projects in country over 2010 to 2025. $100/bbl Brent oil pricing Fiscal regimes according to contractual framework for oil, condensate/NGL and natural gas
Exploration licence - 12 years in total based on 3-year renewal periods 1) Initial 3 year award 2) 1st Renewal (years 4-6) @ 100% of acreage – renewal requires commitment to spud well before end of year 4 3) 2nd Renewal (years 7-9) @ 50% - requires well drilled every 2 years 4) 3rd Renewal (years 10-12) @ 50% - requires well drilled every 2 years
2007 Production licence – 30 years plus additional 10 years (subject to approval of extension) 11 Bahamas Petroleum Company (Red / Yellow) & Bahamas Petroleum Company / Statoil JV (Blue) Exploration Licences Asset (1) Holder Licence Area The Bahamas – Bain Bahamas Petroleum 775,468 acres 2 Licence (offshore) Company 3,138 km The Bahamas – Cooper Bahamas Petroleum 777,934 acres 2 Licence (offshore) Company 3,148 km
The Bahamas – Bahamas Petroleum 778,855 acres 2 Donaldson Licence Company 3,152 km (offshore) The Bahamas – Eneas Bahamas Petroleum 780,316 acres 2 Licence (offshore) Company 3,158 km The Bahamas – Miami Bahamas Petroleum 760,973 acres 2 Licence (offshore) Company 3,080 km
Application (2) Holder Licence Area The Bahamas – Bahamas Petroleum 777,900 acres 2 Islamorada Licence Company / Statoil 3,148 km (offshore) The Bahamas – Zapata Bahamas Petroleum 776,200 acres 2 Licence (offshore) Company / Statoil 3,141 km
The Bahamas – Falcones Bahamas Petroleum 774,600 acres 2 Licence (offshore) Company / Statoil 3,135 km Application (3) Holder Licence Area The Bahamas – Santaren Bahamas Petroleum 760,100 acres 2 Licence (offshore) Company 3,076 km
The Bahamas – Andros Bahamas Petroleum 774,500 acres 2 Licence (offshore) Company 3,134 km •Cay Sal and 3rd Round Licence Applications contingent on lifting of Government imposed application freeze – appendix 6.1.
(1) Interest for all licences: 100% (2) Statoil – Bahamas Petroleum Company Joint Venture Applications - there is no certainty they will be granted (3) July 2010 applications with 100% working interest . There is no certainty that they will be granted 12
Bahamas Petroleum Company Technical Achievements (2006-2011) . Retrieved and described original core and cutting samples
. Completed modern computer workstation analysis: seismic, well logs, gravity and magnetics
. Petro-physics well log analysis on original digital and scanned logs
. Seismic and borehole structural geologic analysis
. Risk analyses, cost comparisons and reservoir simulations
. Geochemistry and petroleum systems evaluation
. Shot new advanced 2D seismic, gravity and magnetics on its 100% ** owned areas in June 2010 and January 2011 * * * * * * . Conducted environmental survey on Cay Sal
•Cay Sal and 3rd Round Licence Applications contingent on lifting of Government imposed application freeze (appendix 6.1.) 36 prospects and leads confirmed ** Not all licences have been granted 13 2011 2D Seismic Grid and Mapped Prospects & Leads
Seismic grid plan undertaken by Norwegian seismic companies SeaBird Exploration (www.sbexp.com) in 2011 and Spectrum (www.spectrumasa.com) in 2010. Following various negotiations with other oil companies, it is expected that an additional partner will join our project post the structural definition and potential volumetrics determined by this more detailed survey. 14 Previous Wells Drilled – Core Interpretation
Numerous hydrocarbon shows throughout all wells
15 Bahamas Petroleum Company 2010 2D Survey Giant Prospects & DHIs
N C4 S 2 km
1 sec
2 sec
3 sec
Diffuse chimneys above structure Direct Hydrocarbon Indicator (DHI) Seafloor vent – active hydrocarbon seepage creates vent on seafloor 16 Seismic Data Analysis September 2010
Dim spots Water bottom evulsion features Flat reflectors
5 Kms
Stratigraphic variations, amplitude and frequency variations associated with porosity and/or hydrocarbons; C4 structure with potential gas chimneys and seafloor vents
Hydrocarbon signatures - polarity reversal across the crest of the structure caused by presence of hydrocarbons and porosity in reservoir; also frequency absorption and amplitude dimming across the crest of the prospect
17 Giant Prospects - Bahamas Petroleum Company Map Structure top of Cretaceous
25 Km
Contour Interval 0.100 Seconds = 100 ms
Prospects
18 2011 - 2D Seismic showing top of Cretaceous Yellow horizon mapped during survey to define structures
5 Km 0.500 Seconds TWT High/Shallow
3.500 Seconds TWT Low/Deep
Brut stack seismic display processed on board vessel during acquisition 19 Size of Prospects Identified by January 2011 2D Survey
Table 1 Polygons Based on Lowest Closed 50 ms Contour, February 2011
Polygon Length Sq Km Acres Closure Comment F11-C1 55 200 49,400 50-150 ms closure Based on 1.150 closed contour
F11-C2-C3-C4 70 465 114,900 400-600 ms closure Based on 1.550 closed contour
F11-C3-C4-S 20 96 23,700 300+ ms closure Based on 1.250 closed contour
F11-C3-C4-N 31 69 17,000 150+ ms closure Based on 1.300 closed contour
F11-C2 14 33 8,150 100+ ms closure Based on 1.300 closed contour
F11-B1 13 44 10,870 < 50 ms closure Based on single closed contour 1.900
Contouring and Structure Height Subject to Change with Final Processing and Interpretation
20 Identified Giant & Super-Giant Leads
Tenneco Max Case Most Likely Case Minimum Case Resource est 100% Structural Fill 50% Structural Fill 33% Structural Fill bn bbl bn bbl bn bbl
Manta Ray 1.447 0.543 0.049 Sand Shark 1.386 0.244 0.071 Blue Fin 3.469 0.406 0.069 Lion Fish 1.322 0.268 0.16 Blue Marlin 1.94 0.439 0.238 Grouper 6.492 1.665 0.837 Tenneco Map Hammer Head 1.007 0.299 0.121 1986 TOTAL for play in 17.063 3.864 1.545 • GREEN - 4-way isolated closure (COMBINED 33,581 ACRES) billion barrels • YELLOW - 4-way combined closure (COMBINED 122,441 ACRES) • BLUE - 4-way & fault closure to spill (201,144 ACRES) • Structure map on Lower Cretaceous Tenneco & Bahamas Petroleum Company lead maps and resources of same structures. Bahamas Petroleum Company was unable to identify Tenneco’s named leads relative to Bahamas Petroleum Company’s.
Bahamas Max Case Most Likely Case Minimum Case Petroleum 100% Structural Fill 50% Structural Fill 33% Structural Fill Company* bn bbl bn bbl bn bbl Resource est
C1 11.947 4.420 1.770 C2 5.865 2.170 0.870 C3 3.693 1.366 0.550
2007 C4 2.791 1.030 0.410 TOTAL for play in 24.296 8.986 3.600 billion barrels
* Based on volumetrics work by consultant petrophysicist. Numbers represent a highly 21 speculative assessment of potential resource. Giant Prospects - Bahamas Petroleum Company Map Comparison of 2011 Prospects versus 2007 Leads*
25 Km
Contour Interval 0.100 Seconds = 100 ms
* 2007 leads outlined in black
22 Cuba Ramps Up Exploration Activity
In 2005 Repsol, with partners Statoil and World class operators have been attracted to India ONGC, drilled a well 60 miles west of Cuba and The Bahamas Cay Sal Bank. The group plans to drill another one or two wells this year in the same area. In 2009, based on knowledge of the Cuban petroleum province, Statoil joint ventured with Bahamas Petroleum Company to explore the Cay Sal Bank.
Other recent Cuban exploration news: • April 6, 2011, Repsol YPF expects to have Chinese-built drilling rig in Cuban waters by end of the summer (Reuters) • April 5, 2011, Cuba to drill wells by 2013 (Dow Jones Newswires) • November 17, 2010 – Gazprom, the Russian oil company farms into four Petronas Offshore Cuba Blocks earning a 30% stake. First Well 2011 • “Russia`s Zarubezhneft to drill Cuba oil shelf in 2011 – CEO” (RIA Novosti, Moscow + www.cubastandard.com 14 July 2010) • “Russian Oil Company JSC Zarubezhneft * Opens Office in Cuba” (Latin America Herald * Tribune + www.cubastandard.com 25 June 2010) • “Cuban offshore oil exploration preparations”
(Reuters 01 Aug 2010) * Cay Sal and 3rd Round Licence Applications contingent on lifting of Government imposed application freeze (appendix 6.1.) 23 Key Conclusions
. First mover advantage in assembling acreage in The Bahamas
. Oil province with world-class exploration potential
. Strategy to use farm-outs and also retain 100% owned acreage
. Size and scale of the opportunity attractive to Majors and NOCs
. 2D modern seismic acquired in June 2010 and January 2011 confirms the Company’s petroleum assessment of multiple giant size structures capable of holding > 500 MBoE
. CPR underway to define scope of seismic analysis and to identify high-grade prospects to be drilled in H1 2012
. In discussion with other potential partners and more deals expected in time
. Raised US$ 73.0 million before (before expenses)
Intended use of placing proceeds:
. 3D seismic and 2D shallow seismic US$ 36.8m
. Geochemical sniffer / multibeam US$ 6.4m
. Working capital and other exploration costs US$ 26.1m
Bahamas Petroleum Company believes there are supergiant oilfields to be found in Bahamas waters and is working on its own and with partners to find them 24
Appendix
1. Historical Bahamas Activity 1.1. Great Isaac Oolite – Anhydrite Reservoir – Seal Pairs
2. Seismic Data Analysis February 2011
3. Seismic Data Analysis September 2011
4. The Bahamas: Petroleum system evaluation and hydrocarbon charge potential
5. Licence Application Update August 2010 5.1. Licence Application Update August 2010
6. Industrial Port, Grand Bahama 6.1. Buckeye Partners completes acquisition of 100% interest in BORCO 6.2. Statoil acquires rights to South Riding Point 6.3 Repsol Moving ahead with Cuba Oil plans 5 April 2011 6.4 Cuba, Partners to drill 5 Gulf Wells this summer 5 April 2011
7. Placing to raise approximately £46.8 million
25
Historical Bahamas Activity
WELL YEAR OPERATOR TOTAL AGE AT TOTAL DEPTH DEPTH
Andros Island – 1 1947 Superior 4.446m Early Cretaceous
Cay Sal – 1 1959 Bahamas 5.763m Jurassic or Early California Cretaceous
Long Island – 1 1970 Bahamas 5.351m Jurassic or Early Gulf Cretaceous
Great Isaac – 1 1971 Bahamas 5.440m Jurassic California
Doubloon Saxon – 1 1986 Tenneco 6.626m Early Cretaceous
. Five wells drilled in The Bahamas between 1947-1986 − Indicate active petroleum systems based on the presence of oil shows of varying quality, abundant reservoirs and seals, indications of source rocks and hydrocarbon saturations from log interpretation
. All licences abandoned prior to 1988, largely due to the lack of deepwater drilling capability and seismic expertise, with the exception of Kerr McGee who undertook a nominal programme north of The Bahamas Islands, subsequently exiting in 2006
. All Bahamian Government geological technical data was destroyed in 1980’s hurricanes
. No compelling incentive for international exploration Source: The Commonwealth of The Bahamas activity post-1985 due to low oil price from 1986 to 2003 which in turn led companies to remain in more conventional producing areas
Appendix 1
Great Isaac Oolite – Anhydrite Reservoir – Seal Pairs
Great Isaac 10,313’
OM
IG
cm
1 m m 10,343’
OOID GRAINSTONE - PRESERVED INTERGRANULAR (IG) ANHYDRITE – SEAL ROCK & LEACHED OOID GRAIN MOLDS (OM) POROSITY NOTE: ANHYDRITE IS THE EXCELLENT RESERVOIR POROSITY (BLUE DYE) & TYPE SEAL ROCK FOR THE PERMEABILITY CHARACTERISTICS WORLD’S LARGEST OILFIELD IN SAUDI ARABIA Appendix 1.1 Seismic Data Analysis- February 2011
RNS Number : 4546B Bahamas Petroleum Company PLC 18 February 2011
· Preliminary onboard processing of recently completed 2D seismic survey in southern Commonwealth of Bahamas waters shows numerous structures with four way dip closure significantly larger than previously expected.
· Detailed processing will take approximately two months, which will verify the preliminary interpretations and give further in depth analysis.
· Potential 3D seismic survey being considered with a number of suitable vessels available on short notice.
· The presence of a potential Middle Jurassic salt layer may point to a further "sub-salt" play in the area.
Bahamas Petroleum, the oil and gas exploration company with licenses in The Bahamas, is pleased to announce the posting on its website of two recently completed, independent consultant studies by Dr. Mark Rowan of Rowan Consulting Inc (Jan 2011) and Mr. Ozanisch of Lago Petroleum Consulting (Feb 2011). These documents provide important results from the June 2010 fully processed Pre-Stack Time Migration (PSTM) data along with preliminary mapping results of shipboard analysis of the January 2011 2D seismic survey. Both provide evidence of 'giant' size structures in the southern licences held by the Company's subsidiary, Bahamas Offshore Petroleum Ltd., capable of holding several hundred million barrels of oil. They provide the first structure maps documenting the size and extent of closure of these features, based on 1,120 km of seismic data and demonstrate the consistency of fold formation, the continuity of folds along the structural trend, the ability to seismically map internal stratigraphic consistency (i.e., continuity of reservoir-seal strata) across the folds and the geometric form of the folds.
These results are preliminary and the full PSTM processing of the 2011 2D seismic data is due for completion by end April 2011 and will form the basis for detailed structural interpretation and prospect evaluation. In addition to the seismic data, gravity and magnetics data were acquired which are currently being processed.
Dr. Paul Crevello, CEO of Bahamas Petroleum Company Plc , said:
"Rowan and Ozanich's reports are significant because they provide the first modern interpretation of seismic data and exploration potential of the Bahamas Offshore Petroleum licences from the Bahamian fold belt. These independent studies verify the extent and style of structural geometry of the large-scale folds which was not possible from the historical seismic data.
"Improved technology enabled exceptional resolution within the folds, allowing us to see for the first time the lateral continuity of potential reservoir and sealing strata. These studies are important for several reasons:
Appendix 2 Seismic Data Analysis- February 2011, cont’d ...
1) the 2010 PSTM data indicates that the structures are simple folds and that reservoir-seal strata appear to be continuous across the extent of the structures;
2) continuity of reservoir-seal pairs will enhance long-distance drainage of reservoirs;
3) the detachment of the compressional folds suggests the presence of a Jurassic salt layer and may provide a deeper 'subsalt' exploration play which we had believed was present but could only document in the June 2010 seismic, and;
4) the size of the fold belt prospects are considerably larger than those previously defined in the 2007 Competent Persons Report ('CPR').
We are waiting for completion of seismic processing of the January 2011 survey through PSTM and a new CPR to determine undrilled and unproven resource potential."
Non-Executive Chairman Alan Burns, of Bahamas Petroleum Company Plc, said: "These structures are exceptional in the size and extent of the 4-way closure, indeed I am not aware of any anticlines of this size in the Gulf of Mexico - Caribbean region. We look forward to testing these structures with the drill bit to determine if hydrocarbons are present. Bahamas Petroleum intend to stay on course to drill a well within the next twelve months, once appropriate drilling and environmental regulations are in place in the Commonwealth of The Bahamas."
Appendix 2 cont’d Seismic Data Analysis September 2010
DG Consultant Services 607A Kipling St., Houston, Texas 77006, 713 927 2251
September 15, 2010
Introduction:
Bahamas Petroleum Corporation (Bahamas Petroleum Company) acquired 194 kilometers of 2D seismic data in July 2010 in order to evaluate the capabilities of improving seismic data quality through modern acquisition techniques, and processing algorithms utilizing massive computer power.
Analysis:
Data results of this survey show better data quality than previous vintages acquired most recently in the 1980’s. Vintage geologic and seismic data (1986) previously documented the potential presence of multiple >500MMboe fields. These historical studies and recent independent consultant reports (2007-2010) indicate that the area has a high probability for oil, which is supported by oil shows in exploratory and ODP (Ocean Drilling Program) wells drilled in The Bahamas, well tests from offshore Florida Keys and offshore Cuba. Bahamas Petroleum Company's June 2010 seismic confirms the previous work and reduces risk placed on hydrocarbon presence.
Bahamas Petroleum Company's 2010 data is more suitable for both structural and stratigraphic interpretation, as well as advanced analyses for hydrocarbon and porosity detection, through amplitude and velocity variation, and frequency absorption due to hydrocarbons.
The new data present clear evidence of large structures (figure 1) with continuous layering of probable reservoirs and seals across the breadth of the folds and hydrocarbon fluid flow features including chimneys or vents, and direct hydrocarbon indicators as can be seen in figures 2 and 3. There is further evidence from the sections of likely fluid controlled amplitude variations and flat-spots (figure 4) which may indicate fluid interfaces of various phases of hydrocarbon contacts. Vertical chimneys into the sea bottom as well as amplitude dimming and frequency absorption in figures 2 and 3 are direct evidence of in situ escaping hydrocarbons from well charged structures. Typically the light ends of the hydrocarbons escape through micro-faults and fractures and provide indicators of hydrocarbons preserved within the structure.
The types of features observed over the structures and along rock layers are indicative of an oil-prone system with minor amounts of lighter ends escaping to the surface. The abundance of hydrocarbon indicators supports recent consulting studies that proposed the petroleum system is operative (see APT summary of report posted on Bahamas Petroleum Company website).
Summary:
Bahamas Petroleum Company’s 2010 seismic acquisition and processing program successfully demonstrates the advantages of modern acquisition and processing systems and computer power. As well as imaging large structures with over 700 hundreds of milliseconds (2-way time; i.e., ~4000 feet) of closure, there are numerous geophysical indications of porosity variations and hydrocarbons in the system. It is anticipated that a closely spaced 2D grid or 3D will prove up drillable prospects by the end of the year.
J. (Jock) Drummond Dr. Norman S. Neidell
Appendix 3 Conclusions of the Report "The Bahamas: Petroleum system evaluation and hydrocarbon charge potential”- October 2010
A study by: Applied Petroleum Technology (UK) Ltd. (www.aptec.no) Oct 2010 conducted independently for Bahamas Petroleum Company Limited
Disclaimer – General This report contains a number of assessments and opinions presented by Applied Petroleum Technology (UK) Limited (APT UK) based on the information provided and on the company experience. However, as the oil and gas business is an inherently risk business, no one can accurately predict the outcome of any drilling or completion operation. APT UK neither warrants nor guarantees the results of any work programme carried out as a result of any predictions or comments made in this Independent Report.
Disclaimer – Specific It should be noted that given the actual well density in the Bahamas (there are only 5 wells over some 100,000 square miles) there is a high level of uncertainty about the true nature of the sub surface. The reader should be aware that this report has been based on the data available but given the uncertainty the ranges of actual maturity and some quality in the area may vary widely from those presently understood. The estimates and conclusions in this report being scientific judgments, may vary considerably from the currently available results and the authors make no claims as to the accuracy of any information herein or assume any liability or responsibility for actions or decisions taken as a result of reading this report.
All parties reading this report should also be aware that exploration and drilling for hydrocarbons involves a degree of inherent risk and is considered speculative. There is the possibility that wells drilled as a result of the current work carried out, may not recover oil and gas in commercial quantities. Discussion of potential traps, structures, facies changes, generation of oil, maturation and timing and migration of hydrocarbons and hydrocarbon volumes, should not be taken to imply that any commercial accumulations exist.
The following conclusions are excerpted from an independent technical report that has bearing on the hydrocarbon analysis of Bahamas Petroleum Company's acreage.
SUMMARY
A regional geochemical review study has been carried out on behalf of Bahamas Petroleum Company Limited on the Bahamas area with the specific objective of assessing:
1) The likelihood of the presence of source rocks within or adjacent to the area of interest (AOI); 2) The likely thermal maturity of the potential source rocks to generate oil or gas; 3) The evidence for the presence of mature generative source rocks in the area of interest.
The conclusions are as follows:
Source rocks:
• It is believed that there are source rocks of sufficient quality and maturity to generate significant volumes of hydrocarbons in the Bahamas although they are poorly quantified in the very few wells drilled in this very large area.
Appendix 4 Conclusions of the Report "The Bahamas: Petroleum system evaluation and hydrocarbon charge potential”- October 2010 cont’d...
Maturity:
• Geothermal gradients are believed to be genuinely low in the area of interest but given the thicknesses of sediment accumulated at the depths where the potential source rocks are likely to exist, these source rocks should have been oil generative. Current low temperatures will be conducive to the preservation of hydrocarbon accumulations.
Manifestation:
• Live hydrocarbon shows have been encountered during drilling of at least four of the five deep wells drilled in the Bahamas and even in a number of the relatively shallow stratigraphic boreholes (ODP/DSDP) in or close to the AOI; • Sea bottom sediment sampling has recorded the possible presence of migrated hydrocarbons of thermogenic origin in several drop cores close to the location of the Doubloon Saxon-1 well; isotopes suggest oil prone source; • There is evidence of hydrocarbon seepage in the form of an area of seismic opacity in the near surface close to one of the recently mapped seismic leads likely caused by vertically migrating gas.
Preservation:
• Hydrocarbon accumulations derived from the Bahamian source rocks are thought most likely to occur in deep prospects in the fore deep close to the known Cuban effective source rock system. • Hydrocarbon quality is likely to be influenced by the source rock system and provide aromatic oils and (depending on the source) possible traces of sulfur. • Gravities are likely to be in the 35 to 40° API range. Degradation processes are unlikely to have negatively affected oils generated.
Dr Steve Thompson Patrick Barnard Applied Petroleum Technology (UK)
Appendix 4 cont”d Licence Application Update – August 2010
Bahamas Petroleum Company News Release – 31 August 2010:
Bahamas Petroleum Company, (“BPC” or the “Company”) the AIM quoted oil and gas exploration company with licences in The Commonwealth of The Bahamas, notes the announcement from the Ministry of the Environment (Government of The Bahamas), issued late yesterday, concerning oil exploration in the country.
Included below is the full text of the announcement:
“MINISTRY OF THE ENVIRONMENT - OIL EXPLORATION IN THE BAHAMAS
Nassau: The Public is advised that The Ministry of The Environment has suspended consideration of all applications for oil exploration and drillings in the waters of The Bahamas. The Ministry seeks, by this decision, to maintain and safeguard an unpolluted marine environment for The Bahamas, notwithstanding the potential financial benefits of oil explorations. Additionally all existing licences will be reviewed to ascertain any legal entitlement for renewal.
Given recent events involving oil exploration and the efforts to prevent pollution, this prudent safeguard is essential to preserving the most vital natural resource of The Bahamas, its environment.
The Ministry will work diligently to complete and have in place, very stringent and environmental protocols for oil exploration prior to any further consideration of applications, given that oil is likely to be located in the marine environment of The Bahamas.
The Ministry of The Environment believes that this prudent policy requirement is in the best interest of The Bahamas and the social, economic and environmental wellbeing of future generations of Bahamian citizens and visitors.
The Hon. Earl D. Deveaux, MP Minister of The Environment 30th August 2010”
BPC understands and appreciates the position of the Government of The Bahamas in delaying the granting of new applications and its reviews given the drilling bans in place in US waters until the cause of the Macondo well blowout are fully determined and appropriate new controls are put in place.
In the meantime the Company will continue to process and seismically explore its existing granted licences, which contain the majority of BPC’s targets. The Directors believe that by the time BPC’s drilling program is more definitive, the situation brought about by the Macondo incident will become clear and that appropriate and stringent controls will be in place. BPC is committed to working with the Government of The Bahamas to ensure that the highest exploration and environmental standards are in place.
Recently BPC completed a baseline sampling in the southern Bahamas to establish the presence of oil and tar balls prior to any possibility of contamination arriving from the BP spill. The sampling showed the presence of pre-existing tar balls and oil seeps washed ashore that were not from the BP source. This oil appears to be sourced from natural seeps and possibly oil tanker spillage. Bahamas waters have through-traffic of a large percentage of the world's oil tankers.
Alan Burns commented, “Whilst we note this short term situation, there are exploration activities including drilling, proceeding in adjacent Cuban waters and significant previous drilling within the Company's current licence areas. We believe these do not face the same geological risks as those encountered in the US Gulf of Mexico. We enjoy a good relationship with Bahamian authorities and are confident that this situation will be resolved quickly."
Appendix 5 Licence Application Update - August 2010
News Article in The Bahamas Tribune: Govt suspends consideration process for oil exploration August 31, 2010 By TANEKA THOMPSON Tribune Staff Reporter
GOVERNMENT has suspended the consideration process for all oil exploration and drilling applications until the country has stringent environmental protocols in place to mitigate against a catastrophic oil well leak.
According to Environment Minister Earl Deveaux, the new stipulation comes in response to British Petroleum's (BP) devastating oil leak in the Gulf of Mexico - which threatened fragile marine ecosystems and fishing industries - and the large volume of oil exploration applications inundating the government.
"The Ministry of the Environment has suspended consideration of all applications for oil exploration and drillings in the waters of the Bahamas. The ministry seeks, by this decision, to maintain and safeguard an unpolluted marine environment for the Bahamas notwithstanding the potential financial benefits of oil explorations," said a statement released by Dr Deveaux yesterday. The release added that all existing licenses will be reviewed to ascertain any legal entitlement for renewal.
"We are not seeking to interfere with any existing licenses and the people who have licenses know of the policy. The recent events showed us that (a) oil if it is to be found, will likely be in the marine environment and (b) we want to maintain an unpolluted environment.
"And so before we explore for oil we want to have the most stringent environmental protocols in place," said Mr Deveaux when asked to clarify this point yesterday.
BPC Ltd recently partnered with Norwegian oil heavyweight Statoil to search for oil in some 2.5 million acres in Cay Sal Bank and hold five licenses for oil exploration. The government has not issued any licenses for oil drilling in Bahamian waters.
Environment Permanent Secretary Ronald Thompson said that while the ministry has yet to draft the necessary safety protocols, government will frame its future policies around existing ones from other countries. "We haven't drafted any but there are ones that are in existence in other places where oil is current being harvested or explored. We will in short order review all of those and come up with what we think will be the best (policies) for the Bahamas," said Mr Thompson.
Deepwater Horizon's oil rig exploded on April 20, killing 11 workers, and leaking an estimated 4.9 million barrels of oil from BP's underwater well. Yesterday's statement said that calamity underscored the need for precautions. "Given recent events involving oil exploration and the efforts to prevent pollution, this prudent safeguard is essential to preserving the most vital natural resource of the Bahamas - its environment," said the statement.
Speaking to The Tribune, Mr Deveaux said more stringent protocols could have prevented BP's disaster. "Everything we learned about BP suggests that there were a few mishaps that could have been avoided," he said.
In May, Dr Deveaux said it would be "impractical and unreasonable" for the Bahamas to shy away from oil exploration or drilling as a consequence of the environmentally devastating oil leak off the coast of the US state of Louisiana.
"The world is not going to shy away from oil because of this accident. This is not the first or the last," he said at the time. He also said earlier that proper management of resources would be vital to any oil discovery in Bahamian waters.
Appendix 5.1 Industrial Port, Grand Bahama- 2010
BORCO Oil storage terminal at Freeport Industrial Port is the largest oil storage facility in the Caribbean
Tanker off-loading at Freeport Industrial Harbour, Grand Bahama Appendix 6 Buckeye Partners-February, 2011 Completes acquisition of 100% interest in Bahamas Oil Refining Co. Ltd
February 16, 2011
Buckeye Partners, L.P. (“Buckeye”) (NYSE: BPL) announced today that it has completed the purchase of the 20 percent interest in FR Borco Coop Holdings, L.P. (“FRBCH”), the indirect owner of Bahamas Oil Refining Company International Limited (“BORCO”), from Vopak Bahamas B.V. (“Vopak”) for $340 million. As partial consideration for Vopak’s interest in FRBCH, Buckeye issued 1,095,722 of its Class B units and 620,861 of its LP units to Vopak.
As previously announced, Buckeye acquired its initial 80 percent interest in BORCO from affiliates of FRC Founders Corporation on January 18, 2011. This now completes Buckeye’s acquisition of 100 percent of BORCO.
In the aggregate, Buckeye paid $1.7 billion in a combination of cash and equity to acquire BORCO.
www.buckeye.com Accessed 1st March, 2011
Appendix 6.1 Statoil acquires rights to SRP and agrees to capital expenditures and upgrades- October 2009
On 22nd October, 2009 Statoil completed the acquisition of SRP Holding Limited, which holds the lease for the South Riding Point crude oil terminal in The Bahamas until 2049. The lease includes oil storage as well as loading and unloading facilities.
The terminal, which is located on Grand Bahama Island, consists of two shipping berths and ten storage tanks with storage capacity for 6.75 million barrels of crude.
We plan to upgrade the terminal to allow for the blending of crude oils, including heavy oils. Future blending operations will normally be carried out onshore, but facilities will also be installed that allow for blending from ship to ship at the jetty.
The acquisition is a strategic measure that will both support our global trading ambitions and improve our handling capacity for heavy oils. We have rented capacity at the terminal since 1993. New blending facilities and full terminal capacity will strengthen both our marketing and trading positions in the North American market. The terminal will also be an important part of our plans to market our own volumes of heavy oil.
In addition to the existing lease period, we have an option to extend the agreement for an additional 30 years until 2079.
www.statoil.com Accessed 1st March, 2011
Appendix 6.2 Repsol moving ahead with Cuba Oil Plans- April 2011
By: Jeff Franks Tue Apr 5, 2011 www.reuters.com
HAVANA, April 5 (Reuters) - Repsol YPF (REP.MC) expects to have a Chinese-built drilling rig in Cuban waters by the end of the summer and start drilling immediately into a prospective undersea oil field that looks like it could be a big one, a geologist for the Spanish oil company said on Monday. Repsol, in a consortium with Norway's Statoil (STL.OL) and a unit of India's Oil and Natural Gas Corp. (ONGC.BO), plans to drill one well with the high-tech Scarabeo 9 rig and another if the first is successful, said senior structural geologist Gonzalo Zamora at Cuba's Earth Sciences Summit in Havana.
"The perspectives are to find something, if not, we wouldn't be drilling. And the sizes are big," he told reporters after making a presentation at the conference that is heavily focused on Cuba's oil and gas development.
"To drill with so much risk like we have in Cuba, we have to look for a big prospect because the investment to develop it is very big," Zamora said. He said seismic studies of the offshore blocks Repsol has leased have turned up "very interesting prospects" in several geological zones. The company drilled the only well in Cuba's offshore in 2004 and found oil in an "area of much potential," Zamora said.
It has not sunk a second well for various reasons, but contracted with Italian offshore oil services company Saipem for use of its Scarabeo 9 rig, which has been built in China and is now in Singapore undergoing preparations for the trip to Cuba.
Zamora was expected to arrive in Cuba by the end of the summer, but delays were always possible in the offshore oil business. Sources have told Reuters the rig should arrive at the communist-led island by mid to late August.
He said Cuba, which is anxious to tap into its unexplored sector of the Gulf of Mexico, wanted Repsol to commit to drilling two wells, but Repsol limited its risk by agreeing to do one well for sure. Cuba has said it may have 20 billion barrels of oil offshore, although the U.S. Geological Survey has estimated a more modest 5 billion barrels.
After Repsol finishes with the Scarabeo 9, which is capable of drilling in 12,000 feet (3,657 meters) of water, the rig will be handed over to Malaysia's Petronas to drill in its Cuban offshore leases, then to ONGC Videsh, which is a unit of ONGC, for its Cuba exploration. Venezuela's PDVSA may also be in line to get the rig for its Cuban blocks, where areas of "great potential" have been found, PDVSA senior basin analyst Jose Noya told reporters at the conference. He said exploratory drilling could take place "maybe in a year.“ "Once we have the equipment, it will be drilled. Probably we are in the line for drilling ... with the same rig, because it is a rig that can drill in 2,000 meters (of water)," he said of the Scarabeo 9. Last summer, Cuban officials were saying they expected to drill seven wells, but Cuban senior oil adviser Manuel Marrero told the conference that the number now was five. He did not specify who would drill the wells. (Editing by David Gregorio)
Appendix 6.3 Cuba, Partners to drill 5 Gulf Wells this summer- April 2011
Andrea Rodriguez Associated Press Tuesday April 5, 2011, 5:24 pm EDT
HAVANA (AP) -- Cuba and partner companies will begin drilling five oil wells in the Gulf of Mexico this summer in hopes of locating enough crude to justify the costly exploration, an official said Tuesday.
"The prospects are very promising" of finding valuable reserves, said Manuel Marrero, an official with the Ministry of Basic Industry. Cuba's domestic production is exclusively heavy oil with a high sulfur content. Its offshore Gulf waters could contain large quantities of lighter, sweet crude, although a test well in 2004 turned up only modest deposits. Studies since then have pointed to "oil traps" in the marine floor, persuading partner companies to take on the expensive task of exploration in deep water, Marrero said during an earth sciences convention. The drilling is expected to run through 2013.
The Cuban government has designated 59 blocks in Gulf waters encompassing 43,200 square miles (112,000 square kilometres) where private energy companies have said they could drill deep-water test wells. The area opened for international investment in 2000, and currently a half-dozen companies, including Spain's Repsol-YPF, have contracted for 22 of the blocks. None of the companies are American -- due to Washington's decades-old ban of U.S. business dealings with the communist- governed island -- although some U.S. firms have expressed interest in the past.
Marrero repeated Cuba's position that it would be open to partnering with U.S. companies. "Any company could participate under Cuban laws," Marrero said. Earlier this year, Brazilian officials announced that country's state-run energy giant, Petrobras, would withdraw from the Cuban area. "They had a small block, barely 1,500 square kilometres," Marrero said. "They discovered prospects, but that can't compete with the hundreds of prospects they have" in Brazilian territory.
According to geologic studies conducted by several institutions, some of them U.S.-based, Cuba's Gulf reserves could be 5 billion to 9 billion barrels of crude. Nearly a year after the Deepwater Horizon disaster that killed 11 workers and led to more than 200 million gallons of oil spewing from a BP well a mile beneath the Gulf of Mexico, Marrero assured reporters that Cuba's exploration will be carried out safely.
"The equipment that will be used is the most modern, the safest. The regulatory framework is very strict, and the companies that will drill are prestigious and experienced," he said. "I don't think we are going to have any more risks.“
Earlier this year, Cuba reported its 2010 production totalled 4 million tons of petroleum equivalent -- oil plus natural gas -- or about 46 percent of its domestic consumption. The rest it obtains from Venezuela on preferential terms.
Appendix 6.4 Placing to raise approximately £45.6 million- March 2011
RNS Number : 0208D Bahamas Petroleum Company PLC 16 March 2011
Bahamas Petroleum Company plc ("Bahamas Petroleum" or the "Company") Placing to raise approximately £45.6 million Notice of Extraordinary General Meeting ("EGM")
Bahamas Petroleum, the oil and gas exploration company with licences in The Commonwealth of the Bahamas, announces that Canaccord Genuity Limited, FirstEnergy Capital LLP and Novus Capital Markets Ltd, on behalf of the Company, have firmly placed 110,000,000 new ordinary shares of 0.002p each in the capital of the Company ("Shares") ("First Tranche Placing Shares") and conditionally placed a further 133,100,000 new Shares ("Second Tranche Placing Shares", together, the "Placing Shares") (the "Placing") with new and existing institutional investors at a placing price of 18.75 pence per Share, to raise (assuming all Placing Shares are issued) approximately £45.6 million (before expenses).
Net funds raised will be used to accelerate the Company's exploration programme (including the acquisition of new 3D seismic, geochemical seabed sampling and other technical work) and for general working capital purposes. The proceeds of the Placing will also provide financial flexibility to develop additional leads in awarded licences and to progress on-going licence applications.
The Placing Shares will rank pari passu with all existing Shares and will, assuming all are issued, be equivalent to 24.6 per cent. of the current issued share capital of the Company, and will represent 19.8 per cent. of the issued share capital of the Company as increased by their issue. The Placing is not being underwritten.
The issue of the First Tranche Placing Shares and the Second Tranche Placing Shares will take place separately. Application has been made for the First Tranche Placing Shares to be admitted to trading on the AIM Market of the London Stock Exchange ("AIM") ("Admission") and it is expected that, subject to the placing agreement becoming unconditional in all respects and subject to Admission, the First Tranche Placing Shares will be admitted to trading on AIM at 8.00 a.m. on 18 March 2011.
The issue of the Second Tranche Placing Shares is conditional, inter alia, on the passing by the Company's shareholders at an EGM of a resolution to authorise their issue. Accordingly, the Company will shortly be posting a circular ("Circular") to shareholders containing a notice (the "Notice") convening an EGM to be held at 10:30 a.m on 11 April 2011 at which the resolutions summarised below will be put to shareholders. Application will be made for the Admission of the Second Tranche Placing Shares and, subject to shareholder approval, the issue of the Second Tranche Placing Shares is expected to be completed at 8.00am on or around 12 April 2011 on their Admission. For information purposes, the Circular will be shortly available on the Company's website: www.bpcplc.com.
Following the Admission of the First Tranche Placing Shares, the enlarged issued share capital of the Company will total 1,097,379,096 Shares. This figure may then be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in Bahamas Petroleum under the Financial Service Authority's Disclosure and Transparency Rules. The Company does not hold any shares in treasury.
Appendix 7 Placing to raise approximately £45.6 million- March 2011cont’d...
Background
Since June 2010, the Company has been focused on a targeted 2D seismic program with the aim of defining drillable prospects and assigning resource estimates across its current 100 per cent. owned acreage offshore of The Bahamas. Initial results of the 2D seismic surveys undertaken to date have been encouraging and the Company has commissioned Ryder Scott Company L.P., Petroleum Consultants to conduct an independent technical review of the existing and newly acquired seismic data. This work is expected to be completed during summer 2011.
The Company's strategy going forward is to continue to review potential farm-in proposals in relation to a portion of its licences, whilst also retaining a 100 per cent. interest in selected acreage. The Company is currently holding discussions with potential farm-in partners and believes that the scale of the potential projects will be attractive to major and national oil companies. The Company believes that the additional funding raised or proposed to be raised pursuant to the Placing will allow the Company to progress exploration across its licences earlier than planned and will strengthen its negotiating position with any potential farm-in partners.
Reasons for the Placing
As at 31 December 2010, the Company had approximately US$6m of cash. The Placing will provide the Company with the additional funds necessary to move forward the technical work needed to prioritise and rank drill-ready prospects in the southern licences and to advance exploration of previously defined leads in its licences and licence applications. The proceeds of the Placing will also give the Company the financial flexibility to review additional opportunities in The Bahamas.
Use of Proceeds
The Company intends to use the net proceeds of the Placing for the following purposes:
• 2D and 3D Seismic acquisition and processing £23 million • Geochemical seabed sampling survey £4 million • Working capital including financial resources to further technical investigations within existing awarded licences, ongoing and new licence applications, associated corporate expenses and farm out negotiation costs £16.3 million
Total £43.3 million
Appendix 7 cont’d Placing to raise approximately £45.6 million- March 2011 cont’d ...
The expected use of the proceeds of the Placing referred to above represents the Board's current intentions based on the Company's present plans and business condition. The Company will retain broad discretion in the allocation and use of the proceeds. If the Second Tranche Placing Shares are not issued, these programmes will be scaled back.
EGM
The Company's articles of association ("Articles") contain an authority for the issue of up to 120 million new Shares for cash on a non-pre-emptive basis each year. The allotment and issue of the First Tranche Placing Shares will utilise all but 10 million of this current authority. The allotment and issue of the Second Tranche Placing Shares would exceed the available authority under the Articles to allot new Shares for cash on a non pre-emptive basis without seeking prior shareholder approval.
At the EGM, Shareholders will be asked by way of special resolutions to approve:
(1) the disapplication of the pre-emption provisions in Article 6.3 to enable the allotment and issue of 250 million new Shares (i.e. the Second Tranche Placing Shares and some additional Shares); and
(2) a minor amendment to the Articles.
The Circular will contain a recommendation that shareholders vote in favour of the resolutions at the EGM. Holders of the First Tranche Placing Shares at the relevant date will be entitled to vote in respect of such Shares at the EGM. Subject to the first resolution described above being passed and the allotment and issue of the Second Tranche Placing Shares, the Directors would have authority to issue up to an additional 126,900,000 Shares on a non-pre-emptive basis until 31 December 2011 (which includes the 10 million Shares available under the current authority which will not be utilised by the issue of the First Tranche Placing Shares).
Copies of the existing Articles and the Articles as proposed to be amended will be available for inspection during normal business hours at the registered office of the Company until the date of the EGM or upon request. Copies will also be available at the EGM until its conclusion. A copy of the Circular, together with form of proxy, will be available on the Company's website.
Paul Crevello, Chief Executive Office of Bahamas Petroleum, commented:
"We are very pleased to announce this successful and oversubscribed Placing and support from existing and new institutional investors. The quality of the investor base and level of support we have enjoyed to date is further validation of the prospects for the Company and its assets. Farm-in negotiations are progressing well.
Appendix 7 cont’d Placing to raise approximately £45.6 million- March 2011 cont’d ...
"The Placing is timely as a suitable 3D seismic vessel is due to arrive in the region earlier than anticipated, allowing us to take the opportunity to expedite our exploration programme. The funds will principally be used to fund this 3D seismic survey and associated exploration activities, focused around prospects identified in the recent January 2011 2D survey (reported 18 February 2011).“
Alan Burns, Non-Exec Chairman of Bahamas Petroleum, commented:
"I am very pleased with the successful outcome to the Placing, which further validates our original vision of the Bahamas as a prospective oil and gas bearing area. With these funds we will be able to bring our most prospective licences closer to being drill-ready and look to identify further exploration leads within our licence and application areas.“
Appendix 7 cont’d